Australian based, conservative leaning commentary on politics, media, life, the multiverse and whatever else crosses my mind. Home of the best widely ignored opinions on the 'net.

Thursday, May 08, 2014

Early signs of a one term PM, if not government

OK, OK, it is (to be honest) way too early to making any call on the fate of the Abbott government at the next election (there is, for one thing, the completely unpredictable role mad Clive Palmer and his Senators may play in what can be done with the budget anyway), but apart from the general appallingly ham fisted way he has handled the kite flying exercise of possible budget measures, there are a couple of things which I expect really would kill Abbott's prospects:

a. any significant increase in fuel excise will be wildly unpopular with the middle class, and the argument that the "rich" are also contributing by facing a tax levy will not work if it kicks in at too high a level (say $150,000).

b. Christopher Pyne's sudden enthusiasm for deregulating university fees, if enacted, will guarantee no one under 35 will vote the Coalition for the next decade. A fair few parents of high school students will also be upset, if not parents of those already at university.

The Abbott program never made sense - that his revenue measures (no new taxes except for the one needed for his parental leave plan which is only supported by a handful of voters; giving up revenue from the carbon "tax" and mining tax) and his savings measures (to come from spending cuts, but won't cut pensions, defence - in fact will increase defence spending, Gonski or disability spending, and will deal with carbon dioxide by spending rather than collecting money) would succeed in a budget surplus.

It is only now that voters are realising it.

The tragedy is that the internal Labor war over its disastrous appointment of Kevin Rudd into the leadership (back in 2007, I mean) prevented it from being able to sell the message.

Latest reports suggest the “deficit levy” will cut in at salaries over
$100 thousand a year, perhaps as high as $150 thousand. Anyone who
believes this will infuriate most Australians, either because they
instinctively loathe taxes or because they are shocked at the broken
promise, needs to get out from behind their desk a bit more.

Mosey out of the think tank, take a walk in the park.

In other words, the government can probably successfully argue for it on equity grounds, at least if it were being argued in isolation. (And Labor has to be careful here that they do not appear to be defending the rich when they oppose it.)

What I think Mumbles is overlooking is that it is not in isolation; it has to be sold in the context of how much pain is coming to the middle income earners. If they are hit too hard, they will not care much that a group of people who can afford a tax levy are also paying more. And the higher you set the cut off for it, the less relevant it becomes on equity grounds, from a middle class point of view.

This is where Labor will need to be careful with its messaging - it needs to make it clear that they are opposing the Budget approach looking at it as a whole.